Equity Linked Savings Scheme (ELSS): Who Qualifies and What You Get
Learn how this tax-saving mutual fund works, the lock-in period involved, and the market risks you should consider before investing.
An Equity Linked Savings Scheme (ELSS) is a type of mutual fund designed to help individual investors reduce their taxable income.
Who it's for
This scheme is available to individual investors looking for ways to manage their tax liabilities.
What you get
By investing in these funds, you can claim a tax deduction under Section 80C. Your money is subject to a three-year lock-in period, meaning you cannot withdraw your investment before that time has passed.
What it costs you
When you invest, your capital is subject to market risk. Because the money is invested in the stock market, the value of your investment can go up or down based on market performance.
The catch to know
Returns are not guaranteed. Because these funds are linked to equity markets, you should look for funds with a strong track record rather than assuming a specific profit.
How to apply
- Choose a mutual fund regulated by the appropriate authorities.
- Complete the necessary identification and banking documentation.
- Select the amount you wish to invest and set up your payment.
- Monitor your investment through your provider's platform.